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Capacity constraints in Supply Chains need ‘Flow’ solutions.
Supply Chain teams often struggle with certain capacity constraints in the system. It may be in input material availability, freight, warehousing, or the manufacturing capacity. The typical response is to look at enhancing the capacity through fresh investments. Is it the right approach?
The truth is… what appears to be a capacity problem is often a ‘flow’ problem. Smoothening the flow works like magic and usually eliminates the capacity issue. Let me explain with an example.
Many families buy their kitchen groceries on a monthly or a weekly basis, including fresh items which need to be kept in the refrigerator. They sometimes complain that the fridge capacity is becoming a constraint and they need to buy a bigger fridge. Sounds familiar?
The right answer may not be in terms of investing in a bigger fridge but in streamlining the flow of incoming supplies. If they switch to a ‘Quick Commerce’ solution like Zepto and buy more frequently on need basis, they will not only have much fresher items to consume but also find that the fridge has ‘excess capacity’ now!
Point to ponder…